After the great war which occurred between the gods of Olympus and  the god Cronus, see Zeus and Cronus, the gods decided who would rule over what aspect of human life.  An agreement was made between them that each god would have a specific function with the major god of all being the king of the gods, Zeus.

Zeus ruler of the gods of Olympus.

 

The arrangement of the 12 gods of Olympus went as follows:

Aphrodite -  Goddess of love, and beauty.

Apollo -  God of the sun, light, medicine, and music.

Ares -  God of war.

Artemis -  Goddess of the hunt, the forest, childbirth, and the moon.

Athena -  Goddess of wisdom, war, and crafts.

Demeter -  Goddess of agriculture. 

Hephaestus -  God of fire, and metal working.

Hera - Wife of Zeus, guardian of women, guardian of the family unit and family life, protector of  marriage.

Hermes -  Messenger of the gods, god of commerce.

Hestia -  Goddess of the hearth.

Poseidon -  God of the sea.

There were other Greek Gods as well and they all played a significant part in ancient Greek life, yet they did not reside on Mount Olympus.  These gods included Pluto - God of the Underworld, Dionysus - God of wine and fertility, Hypnos - God of Sleep, Aiolos - God of the wind, and many more like the Nymphs, the Nereids, the Muses etc.

The ancient Greeks were very religious and believed strongly in their gods, they conducted their life in a manner to not upset them.  They built large temples to their honor that exist till this day.  They would hold festivals and athletic competitions to their glory such as "The Olympic Games."  They built statues to their honor and made altars where they would make sacrifices to their gods.  It was commonplace in ancient Greece to find an altar in the courtyard of a house.

They believed that their gods had human form and also carried out in a manner similar to humans.  They believed that their gods resided in bliss on glorious palaces on mount Olympus. Their the Greeks believed that their gods would eat ambrosia and the god nectar brought to them from the ends of the world.

It was believed that the gods often took human form and walked amongst mankind punishing those who were not righteous, and helping those who were.  The gods could come in any form, an old lady, a passer by, a Sheppard etc..  From this belief we have many myths such as Athena and Arachne, when Athena came as an old lady to punish a disrespectful student.  Zeus and Lycaeon, when the god Zeus came as a guest to punish a king who treated his guests badly, and many many more..